Money as motivation

There is no doubt that in some point of your life, you may have been motivated by monetary rewards. Your parents might have offered a nice sum if you pass your exam or you reconsider your resignation after your manager give you a pay raise. But does this always work? Economists set up an experiment to see if offering to pay for blood donation effects our behavior. It turns out that the act of paying for blood donation somehow tainted this act of altruism and less people show up. In this case, monetary incentive actually reduces the performance of the activity.

If monetary incentive don't work all the time, what about monetary punishment. In another experiment, a kindergarten decided to fine parents who come late to pick up their child. Instead of reducing the number of children staying back late, it increases the amount of late parents. They can now be guilt-free by paying the fine.

Money being an extrinsic motivator, seem to back-fire in some cases. They say money can't buy happiness. It seems there is much more that money can't buy.